Ways You Can Finance Your Business Expansion

We all know that regulating finance is always stressful. So, first of all, if you are thinking about business expansion, be it because you want to add a new retail location, expand your product offering, or something similar, well, first of all, that probably means your business is currently going great! Whatever the reason is, you should know that not all plans for expansion are or even can be created equal, and they can sometimes even backfire on you if not planned well. So, before acting on your plans to expand your business, be sure to do your research! On that note, here are a couple of ways that you can finance your business expansion. 

Commercial Lenders

The thing with banks is, they are less likely to loan money to startup businesses. They are, however, the most likely source of financing for already established small businesses. This does make sense since banks are not supposed to invest in businesses that are not going to be able to pay back. Not only that, but they even are strictly limited on this topic by federal banking laws since, in general, they want to prevent banks from taking savings from depositors and investing in risky business ventures. 

Other Lenders

Aside from standard bank loans, a startup business, or a small business can also turn to other lenders in order to borrow money. So, do you need some cash fast and are sure that you will be able to give the money back? You can research more on this topic from a credible lender on the following link: https://www.bstcredit.com.sg/apply-business-loan/ in order to get the best option in regard to your lending plans. It should be noted although – interest rates and fees may be relatively high, this is still often a good source of small business financing that doesn’t want to or can’t find a solution with a bank. Also, in some cases, the lender doesn’t take the risk of payment, which is pretty reasonable to be fair. 

Microloans

It is pretty daunting to venture into a big loan, but, what if you don’t need that much money in the first place? If that’s the case, one option would be to apply for a microloan. This is basically a small business loan ranging from 500$ to 35,000$, but rarely it goes up to 35,000$. Microloans can be arranged both at banks and by another non-profit organization. Either way, microlenders offer smaller loan sizes, usually require less documentation than banks, and often have more flexible options. Although again, beware – if you are going to someone other than the bank, they often charge slightly higher interest rates.

Angel Investment

What are angel investors exactly? Well, while they are a lot like venture capitals, there are two important distinctions. First, angel investors are groups or individuals who invest their own money, and second, angel investors tend to invest in companies at earlier stages of growth, while venture capital typically waits until after a few years of growth, after startups have more history to back the investment up. To be fair, like venture capitalists, angel investors normally focus on high-growth companies, but with a difference being the early stages of development. So on that note, don’t count on them for funding an established, stable, low-growth business. Your next question probably is how to find the “angels” that might want to invest in your business? Some government agencies, business development centers, and similar organizations will be tied into the investment communities in your area, so you can ask them for help on who to turn to.

Crowdfunding

Crowdfunding is both fun and sometimes a very effective way to raise money for a relatively low cost, creative project. It pretty much works by you going on a crowdfunding site, setting a goal for how the money you want to raise over a period of time, and then your friends, family, and strangers then use the site to pledge money to you. Kickstarter has funded a lot of projects, ranging from rock albums to documentary films. But keep in mind that this isn’t about long-term funding, since the idea is to facilitate the asking for and giving of support for single, one-off ideas. A great thing with crowdfunding is that there is no long-term return on the investment!

Fortunately, there really are plenty of smart ways to raise money quickly without necessarily decimating your companies finances, and hopefully, this article has provided you something helpful. So, do your research, be smart, and good luck!